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For Business, Corporate Travel & Meeting Buyers & Arrangers

2017 forecast: hotel rates to rise as air fares stay flat

Global hotel rates are predicted to jump as high as 5 per cent next year, according to travel consultancy Advito’s 2017 industry forecast.

The annual report showed while room rates will climb, air fares are expected to remain flat driven by low fuel costs to offset increase in air demand keeping ticket prices in check.

Advito publishes its annual Industry Forecast to give buyers a range of projected prices they can use to benchmark success against key performance indicators and to prepare for supplier negotiations and budgeting.

The forecast includes supply, demand and pricing trends for air, hotel, meetings, transportation and ride-hailing for all major regions in the world.

Global business class fares on average will rise only modestly in 2017, up to 1 per cent, and economy fares will be remain flat. However, travel buyers should expect greater variation in fares from region to region. For example, regional business fares will range from flat (in Europe and Latin America) to 3 per cent increases (in Asia and Southwest Pacific). Meanwhile, intercontinental economy class fares should fall slightly everywhere except Europe. Advito expects little change in regional economy class fares with 2 per cent reductions in Latin America.

Hotel rates will increase in all regions in 2017, led by North America, Advito projects. Rates in the U.S. and Canada are expected to climb by 3 per cent to 5 per cent with slightly smaller increases for hotels in Mexico. The Southwest Pacific and the Middle East also will see a rise in hotel rates due to insufficient supply and strong demand. In Europe, a modest economic recovery and little new supply will push up rates by up to 2 per cent.

In addition to its pricing forecasts and buying strategy recommendations for air, hotel, meetings and ground transportation for each major region of the world, Advito’s 2017 Industry Forecast also includes travel risk and security, ride hailing trends and air fare price restructuring. It can be viewed here.

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